Draft Trade Union (Levy Payable to the Certification Officer) Regulations 2022 Draft Trade Union (Power of the Certification Officer to impose Financial Penalties) Regulations 2022

John Spellar Excerpts
Tuesday 25th January 2022

(4 days, 12 hours ago)

General Committees
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Paul Scully Portrait Paul Scully
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I will come back to that in my closing remarks. The CO will be able to take up her own views on a matter when there is a breach. It is a wholly reasonable power for a regulator and works on the basis of similar regulators.

John Spellar Portrait John Spellar (Warley) (Lab)
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I declare an interest as a 50-year member of Unite and its previous unions. How will unions protect against vexatious complaints from individuals who have a political axe to grind, whether from the extreme right or the Conservative party, as opposed to dealing with the members, who are supposed to be the people most concerned?

Paul Scully Portrait Paul Scully
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This is not a political move. This is not politicising the regulator at all. The regulations are simply designed to bring the regulator in line with other regulators.

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Paul Scully Portrait Paul Scully
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Because we have proceeded as quickly as we can, given the circumstances of parliamentary time. We wanted to make sure that, in response to the consultation, we could reflect the views of the trade unions by making some changes to the regulations. I will outline them in a second, but I repeat that this is the right time to be making the changes.

Under the financial penalties regulations, the certification officer’s enforcement powers are strengthened by allowing her to impose such penalties against organisations that breach their statutory obligations. The maximum amount of penalty will vary by the type of obligation breached and will be banded into three groups to take account of the severity of the obligation breached. That approach found support during the consultation.

The most important statutory obligations required of trade unions relate to political funding, the proper conduct of union elections and personnel propriety considerations. Those obligations are serious matters and I believe that the maximum penalty of £20,000 should be made available to the certification officer. That is in line with the penalties imposed by other bodies, such as the Electoral Commission.

For other failures of statutory governance requirements, a lower level of maximum penalty, £10,000, is appropriate, and that includes the requirement to keep the membership register up to date. Where breaches do not relate to failures of governance as a whole but to requirements to provide information, comply with investigatory requirements or breaches of internal union laws, the regulations limit such fines to a maximum of £5,000.

John Spellar Portrait John Spellar
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I apologise for taking the Minister back to the previous issue, but I have quickly scanned the explanatory notes. How will the levy be distributed between trade unions and employer associations? On what basis?

Paul Scully Portrait Paul Scully
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I will talk about the distribution in a second.

The regulations also provide for a reduction in the maxima by 50%--bearing in mind that we are talking about the financial penalties—for unions whose membership is under 100,000. That means that no small or medium-sized unions will pay more than £10,000, £5,000 or £2,500, depending on the type of obligations breached. The Government took heed of consultation responses that charging interest would unduly penalise small unions, so we decided not to charge interest for the late payment of penalties.

The Trade Union (Levy Payable to the Certification Officer) Regulations 2022 provide for a levy on unions and employers’ associations to fund the certification officer’s work. It is no longer acceptable for the taxpayer to fund the regulation of these organisations. As my hon. Friend the Member for Thirsk and Malton said, a levy is one of the ways used to fund such regulators. The regulations establish a framework for the levy that is equitable, affordable, predictable and simple.

First, the time that the certification officer spends on each of the different categories of regulated organisations, which are non-federated trade unions, federated trade unions, non-federated employers’ associations and federated employers’ associations—

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None Portrait The Chair
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It is a matter for each individual member to declare their interests as they see fit. It is not for me to tell them whether they should or should not make a declaration, but for them to decide if they have an interest that they feel they need to declare.

John Spellar Portrait John Spellar
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Further to that point of order, Mr Davies. Should Members on the Government side also declare whether they are members of trade unions?

None Portrait The Chair
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What I said applies to both sides of the House.

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Imran Hussain Portrait Imran Hussain
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It is clear that the hon. Gentleman misses the point. There are regulators today and, while I do not know about that specific example, breaches of any kind should of course be investigated, but that is not the matter before us today. This is not a new body that is being set to investigate breaches, so I think the hon. Gentleman will perhaps understand that his point is not relevant to the debate today.

John Spellar Portrait John Spellar
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It might be helpful if we heard whether the hon. Member for Stoke-on-Trent North or other members of the union actually made a formal complaint to the certification officer.

Imran Hussain Portrait Imran Hussain
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That is a matter for the hon. Member for Stoke-on-Trent North, and I will give way if he wants to respond—or perhaps not.

As I was saying, this is an ideological, deliberate attack by the Government on our trade unions, our workers and their rights. Sadly, however, this attack is not without precedent. While they no longer send armed soldiers in to crush striking workers, this Tory Government are no less—[Interruption.] Conservative Members laugh, but they may want to check history and see that those are real events from the turn of the last century. It is not a laughing matter; it is a very serious matter, and if they choose to laugh at that, so be it. This Tory Government are no less opposed to unions.

On that point, let us remind ourselves of this Government’s record. Over the last decade, they introduced the draconian Trade Union Act 2016, eroding the ability of working people to take collective action, imposed illegal employment tribunal fees that priced people out of obtaining justice, and presided over a disgraceful rate of statutory sick pay, which is one of the worst in Europe. They have also broken a promise made during the passage of the Trade Union Act by backtracking on their commitment on electronic balloting, with the Government-commissioned Knight review, published in December 2017 and still awaiting a response from Ministers—more than four years later. It therefore comes as no surprise that Ministers have introduced these anti-union statutory instruments, as well as a further ministerial direction to once more attack working people.

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Chris Stephens Portrait Chris Stephens
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It is a pleasure to see you in the Chair, Mr Davies, and I wish everybody a happy Burns day—the day of our national bard. As you know, Mr Davies, 90% of the world claims Scottish heritage; the other 10% are not trying hard enough. In discussing this legislation, I was reminded of the national bard’s poem “Address To The Toothache”. What I have heard so far from the Government—their excuses for trying to force through this levy—reminds me very much of that poem.

I am proud to declare my membership of Unison’s Glasgow City branch, my role as chair of the Public and Commercial Services Union’s group in this place, and my role as a trade union activist for 25 years before I came to this place. I am a proud trade unionist, and I always will be. I am proud of the work that trade unions have done across these islands.

As someone who sat on the Trade Union Bill Committee, I think it is important to give some context for some of the difficulties that the Government have found themselves in over the past four or five years, and that they still find themselves in. They are attempting today to impose fees on trade unions—a tax on trade unions, as was mentioned earlier—for complaints that could be made against them. At the same time, the Government tried to stop trade unions paying employers to take their subscriptions off under the check-off regulations. The Government ended up having to abandon that part of the Bill. They also had to abandon the holding of lists of those who were picketing an industrial action, because of concerns over breaches of human rights. At the time, they voted down attempts to introduce e-balloting for industrial action and internal trade union elections while they were using e-ballots to decide their own parliamentary candidates and their candidates for London Mayor—you really couldn’t make it up.

In the four years that we have been waiting while the Government have held the consultation—as I mentioned earlier, there have been two general elections since the consultation started—they have been promising an employment Bill, but where is it? We now know: when the Government were asked at the last Queen’s Speech where the employment Bill was, they admitted publicly that it was not a priority. Dealing with zero-hours contracts, short-term shift change notices and all the other abuses that we see in the workplace is not a priority, but imposing a tax on trade unions somehow is.

I have real concerns. I deliberately asked who makes a complaint for the certification officer to look at. In my view, it should be a trade union member. Trade union members have the right to go to the certification officer and raise a concern that they have with trade unions. However, I am sure the Minister will confirm that under the current Trade Union Act, with the new powers that have been issued to the certification officer, any organisation or member of the public can make a complaint against trade unions.

As the right hon. Member for Warley and the shadow Minister mentioned, that can include far-right organisations. Far-right organisations can make complaints against trade unions for their spending on anti-racism work. The trade unions have been one of the drivers in the fight against racism in this country, and I am proud of that, but we can have far-right organisations making vexatious complaints about funding for organisations such as Show Racism the Red Card—I declare that I chair the showing racism the red card all-party parliamentary group—and Hope not Hate.

Of course, we might have other organisations, such as that friend of the Conservative party, the TaxPayers Alliance, making vexatious complaints. It is somewhat ironic that the biggest cost to the taxpayer has been vexatious freedom of information requests, on occasion, from the TaxPayers Alliance, which could make vexatious and malicious complaints against trade unions.

John Spellar Portrait John Spellar
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I think the hon. Gentleman has slightly misnamed that organisation. Given that it will not reveal the sources of its income and that there are credible reports that many of them live abroad, should it not be the “TaxAvoiders Alliance”?

Chris Stephens Portrait Chris Stephens
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I stand corrected. The right hon. Member is absolutely correct: it should indeed be the TaxAvoiders Alliance. I can assure him that if we continue to refer to that organisation in this debate, I will use the appropriate term.

There are real issues with who should be allowed to make a complaint. My view has always been that I do not have a problem with a trade union member going to the certification officer with their concerns, but I will have a real concern if members of the public are allowed to do so.

We keep being told the cost to the taxpayer, but it is not a lot of money—£500,000 or £700,000. I have in front of me the transcript of the debate on the certification officer in the Trade Union Bill Committee. It is a good eight pages of reading, and it is very enlightening as to the arguments against fees and against increasing the powers of the certification officer, and the Government’s excuses about that. However, I have real concerns that what is at the heart of this legislation is an attempt to curb the work of trade unions in this country by imposing a financial cost on them.

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John Spellar Portrait John Spellar
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I want to differ slightly from my hon. Friend the Member for Bradford East, who said that he did not envy the Minister his job. Surely, this must be a blessed relief from being put up on the “Today” programme to defend the Prime Minister’s latest peccadillos.

I declare that I have been for 50 years a member of the Unite union and its predecessors—in that time, I have been a branch chair, a branch secretary, a delegate to the trades council and a national officer of the union—and I am proud to be a trade unionist today. In spite of the behaviour of some trade union leaders, union officials and shop stewards work with employers every day to improve wages, improve conditions and deal with the many personnel issues that do not have to get to industrial tribunals because they are resolved through normal procedure. They are part of the engine that keeps our economy running. They were especially so during the pandemic, when all sorts of changes to rotas, rosters and working arrangements had to take place, particularly for those in public-facing roles who were not able to work from home, who kept society running, often at risk to themselves.

Good employers recognise that role and the importance of their engagement with unions, because they often face unfair competition from unfair employers—those who cut corners, who underpay, who abuse their workforce, who employ people illegally, and so on. Many of those good employers are on employers’ associations, by the way, and we are still not entirely clear how the balance of costs will be allocated. Even a company such as Uber, which initially fought against proper recognition of employment, is working with the unions to regulate that industry, not only here but in the United States. I will return to the international aspect in a little while.

One of the questions we have to address is, “Why now?” Why, particularly, is this coming up now? It has been four years or so in the making. Is this part of Operation Red Meat to throw something to the rabid, foaming Back Benchers of the Tory party, whose leitmotif—one of their articles of faith—is their hatred of trade unions to the benefit of employers, because they know that workers organised will recognise that they need to advance through politics too?

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None Portrait The Chair
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Before the right hon. Gentleman resumes his speech, can I make a plea? This is not a general debate on trade unions, interesting though that may be; it is a debate about specific proposals, which we must stick to. We have a time limit, so if we could stick to the proposals before us, that would be helpful.

John Spellar Portrait John Spellar
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Thank you, Mr Davies. I certainly do not intend to run beyond the time limit in my contribution, and nor would you let me. We are talking about specific proposals, which will bring in additional costs in order to undermine unions. In dealing with the background of that—

Mark Garnier Portrait Mark Garnier
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With apologies the right hon. Gentleman, may I provide an update on my intervention on the hon. Member for Glasgow South West? I have had a look at the numbers on Google. These may not be accurate, but the total revenue for unions is just under £1.3 billion a year. Spread among 6.4 million members—according to these figures—that works out as £195 per year. If, through the levy, we are going to pay the certification officer £1 million a year, which is more than we are expecting, that works out at 15p per member per year. I cannot think of anything that can be bought for 15p, anywhere—not even a KitKat—so the levy is tiny in proportion.

John Spellar Portrait John Spellar
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Of course, it is symbolic for the Tory party, but it is also part of a pattern. The union learning fund, which was mentioned previously; industrial tribunal fees; access to industrial tribunals—it is all part of a drip, drip, drip, wearing away at the ability of trade unions to represent their members.

I am slightly surprised that the Minister prays in aid a time of austerity. Did he not see what happened yesterday in the House of Lords, when his noble Friend Lord Agnew resigned from the Government, saying that they have paid out nearly a billion pounds to banks claiming the state guarantee, and that they estimate that about 20% of that was fraud? Lord Agnew went on to say:

“Total fraud loss across government is estimated at £29 billion”.—[Official Report, House of Lords, 24 January 2022; Vol. 818, c. 21.]

Rather than address that, they want to have another go at the trade unions.

In the same way, the Home Office was found in court to have broken the law by charging excessive amounts—grossly overcharging—to register children as British citizens, yet the Government still have not responded to that by introducing legislation. Again, we ask why not.

Chris Stephens Portrait Chris Stephens
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The right hon. Gentleman is making an excellent contribution. Does he see the irony in these regulations coming from a Government who preach deregulation in almost all sectors of the economy except for trade unions, which are subjected to massive regulation? It goes from laissez-faire to Stalinism with nothing whatsoever in between, does it not?

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John Spellar Portrait John Spellar
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I have no objection to the regulation of trade union activities. I think it perfectly proper—many other countries do it—but what we are seeing is steadily undermining trade unions’ ability to operate at work, as we have seen over many years, and putting increasing burdens on them.

Let us take the example of vexatious complainants, which are covered by the regulations. There are no protections in the event that somebody comes along and says, “I read in The Daily Telegraph or the Daily Mail that this has happened, and I am lodging a complaint to the certification officer.” Quite apart from the cost of the certification officer, that puts a great burden on the unions, which will have to defend themselves against complaints not from members or even employers, who have other routes to make complaints about union behaviour, but from somebody sat in his armchair, picking up on a story in his newspaper. Why is that included in the regulations?

Kevin Hollinrake Portrait Kevin Hollinrake
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I want to clear up one point. Personally—I probably speak for one or two others on this side of the Committee—I am not against trade unions, but I am for a fair balance between workers’ rights and the rights of business. I am also after a fair balance in who pays for that. In the UK, there are 6 million members of trade unions, but 10 million retired people and 6 million self-employed people. Why should those taxpayers pay for the people who benefit from trade union activities?

John Spellar Portrait John Spellar
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I think that applies to all sorts of activities. Of course, the hon. Gentleman is assuming that those 10 million retired people were not trade unionists when they were at work—a great majority were. They may actually believe in trade unions and think that there were very good in their time, and may regret that the role of trade unions has been diminished by persistent attack from Conservative Governments and employers.

Paula Barker Portrait Paula Barker
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Does my right hon. Gentleman agree that some retired people are still members of trade unions, participate fully in their structures, and benefit from them?

John Spellar Portrait John Spellar
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My hon. Friend makes a very good point.

In addition, even those who are not union members benefit from union activity. If they work in an establishment, they will benefit from a pay rise. If they move from employer to employer in an industry that is mobile in and of its nature, such as the construction industry, union agreements underpin their terms and conditions. Interestingly, in Western Australia, when the Conservative Government was trying to bring in very rigid regulation of unions, many well-paid non-union members in the mines recognised that their terms and conditions and balance of power with the employer were underpinned by trade union activity and organisation. Basically, when unions are working well, everybody benefits—not just workers, but the economy and good employers.

What we have seen with the international attack led by the Republican right in the United States, as indeed with their so-called voting regulations—again, to address non-existent problems—is the labour share of gross domestic product around the world steadily declining in the face of those attacks, and that directly reflects the decline in union influence in the workforce.

Of course, that plays into the economy as well, because what we see then is a demand deficit in the economy. As money has been put into the economy, particularly during the era of covid, the amount of money that has been skewed towards the ultra-rich and super-rich has been going up while living standards have been kept down. Again, we saw that with Thatcher-Reagan and—

None Portrait The Chair
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Order. I have given the right hon. Gentleman considerable latitude, but I do not want a history lesson on the 1980s. I want us to come back to what we are actually debating today. I trust he will do that.

John Spellar Portrait John Spellar
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You are right to bring me up to date, Mr Davies, because today, from the Government’s point of view, these sorts of regulations, which will be seen as anti-union not only in this country but elsewhere, will not help us in our relations with the United States, where there is an Administration that is strongly pro-union. We are trying to get a trade deal, and trade and workers’ rights are not unconnected. If we look, for example, at the import of personal protective equipment into the United States, a firm in Malaysia has been found guilty of unfair labour practice—forced labour. The United States then says, “We are barring that company from selling into the USA.”

Craig Mackinlay Portrait Craig Mackinlay
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The right hon. Gentleman is offering a great exposé of the history of the trade unions locally and internationally. We are talking here about a sum across the entire trade union movement of approximately £1 million at best, with an income, as highlighted by my hon. Friend the Member for Wyre Forest, of about £1 billion. I have just looked up some donations to the Labour party in 2019: £3.5 million for the election from Unite and £425,000 from the CWU. Is the right hon. Gentleman suggesting that by saving some of the administration costs to the union movement, it can recirculate more to the Labour party? Is that the core of his arguments?

John Spellar Portrait John Spellar
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That is a pretty poor argument because that would be in breach of very long-standing trade union legislation whereby members make a donation through the political levy to the political fund, which is protected. If the hon. Gentleman has one shred of evidence of administrative general fund money being channelled through into the political fund, even under the current law he can go straight down, because someone is not required to be a member in order to make that sort of payment. He might be a bit more sensitive about political donations and spending, but we will leave that on one side.

Craig Mackinlay Portrait Craig Mackinlay
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On a point of order, Mr Davies. I like political debate. I was acquitted in a court of law, and the right hon. Gentleman wishes to raise that in this debate. I find that disgusting, Mr Davies.

None Portrait The Chair
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That is not really a point of order. As I have pleaded before, we must stick to the issue before us today. If the right hon. Member for Warley will not stick to the issue before us today, I will move on to someone else who might. I urge him to stick to what we are debating today. He will have no further latitude because I have already given him plenty.

John Spellar Portrait John Spellar
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Thank you, Mr Davies. I am arguing that these measures are not only wrong but, even from the Government’s own point of view, ill-advised, particularly because, as I have indicated, the United States has a new Administration with a very different perspective on labour-union rights. They have made that explicitly clear in policy, but also in appointments and in the decisions of the National Labor Relations Board.

I very much support a trade deal with the United States, as I supported the transatlantic trade and investment partnership, unlike some in my own party. However, if our Trade Secretary is seen as pleading for a trade deal, and we are seen as moving further and further into anti-union territory, into the old Republican right, that will count against us, because Joe Biden will be President for the next three years.

The Minister ought to have discussions with the Department for International Trade to ascertain whether petty, sneaky actions that nibble away at trade unions will actually benefit not just the Conservatives, but this country in securing a very desirable trade deal. It is clear from President Biden’s statements that he very much believes that when unions prosper, the middle class prospers and America prospers. That is true in the States; it is true here. The Government better get the message that there is a new sheriff in town, and these sorts of actions are not going to help them—or Britain either.

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Paul Scully Portrait Paul Scully
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I am grateful to the Committee for its consideration of both sets of regulations and for Members’ valuable contributions to the debate. As I said in opening the debate, unions play a really important role in industrial relations and have a significant impact on our economy. That is why it is imperative that the public have confidence that they are being regulated effectively and fairly, and these reforms ensure just that.

It is a shame that there was a job lot of questions, because I now have eight minutes to answer all of those. Actually, we have just been re-rehearsing the arguments that were made on the overall premise, which was agreed in relation to the Trade Union Act itself. I will answer some of the questions. Clearly, the employment Bill, as the hon. Member for Glasgow South West knows, is primary legislation. It will be announced, when it comes forward in parliamentary time, in the Queen’s Speech. This measure—what we are addressing today—is completing previous legislation and therefore does not have to go through the same process. The certification officer has received 62 complaints in the last few years. Not all of those had to be investigated, because they could be dismissed. Eight were upheld, and there was one enforcement notice. That is what comes through to—

John Spellar Portrait John Spellar
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rose

Oral Answers to Questions

John Spellar Excerpts
Tuesday 11th January 2022

(2 weeks, 4 days ago)

Commons Chamber
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Greg Hands Portrait Greg Hands
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I absolutely accept that invitation. There is no more passionate an advocate of new nuclear in this House than my hon. Friend. Nuclear is going to be a vital part of our future. The UN Economic Commission for Europe recently said that international climate objectives would not be met if nuclear power were excluded, so it is a key part of our net-zero ambitions.

John Spellar Portrait John Spellar (Warley) (Lab)
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I was disappointed that, in his reply, the Minister did not refer to small modular nuclear reactors, which surely are the future in this sector. Can we take the lesson from the vaccine taskforce that rigorous scientific methods can be combined with speeding up the process and cutting out dead time? Can he convey that message to the regulators so that this world-beating technology can be built in Britain to the benefit of British industry and British workers?

Greg Hands Portrait Greg Hands
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I absolutely share the right hon. Gentleman’s enthusiasm for SMRs. At the end of last year, the Secretary of State announced funding for SMRs of £250 million, working with Rolls-Royce and with the best of British industry and innovation on SMRs. I recently had a meeting with Sheffield MPs as well, where we talked about Sheffield’s potential to host SMRs, along with other sites. SMRs are very much part of our nuclear future.

Gas Prices and Energy Suppliers

John Spellar Excerpts
Thursday 23rd September 2021

(4 months, 1 week ago)

Commons Chamber
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.

Each Urgent Question requires a Government Minister to give a response on the debate topic.

This information is provided by Parallel Parliament and does not comprise part of the offical record

Kwasi Kwarteng Portrait Kwasi Kwarteng
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What happens—and it is happening at the moment—is that there is a process of bidding for the customers of the exiting, failing companies, and the cost of absorbing those customers is taken on by the company that wins the bid and also by the industry at large; so the costs are mutualised, but generally it has been seen that there is always continuity of supply. That is a key element of the system.

John Spellar Portrait John Spellar (Warley) (Lab)
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The Secretary of State clearly believes that the invisible hand of the market will solve all this without his doing anything—but when he talks about customers, does he mean only domestic consumers, or will he ensure that supply continues to keep industry going and jobs secure? In that context, does he think it acceptable that Germany has some 90 days of gas storage while we have only nine days’ worth? Will he also commit himself to ensuring that there are adequate supplies under our control for the future by licensing new gasfields?

Kwasi Kwarteng Portrait Kwasi Kwarteng
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We protect domestic consumers in the way I have outlined, but it is fair for the right hon. Gentleman to raise the issue of industrial users of energy in business. He will know that we have schemes that which protect industrial users of energy: we have the energy industry incentive scheme, and yesterday we launched a new tranche of the industrial energy transformation fund with up to £220 million, which enables businesses to bid in for further support.

UK Steel Production: Greensill Capital

John Spellar Excerpts
Thursday 25th March 2021

(10 months, 1 week ago)

Commons Chamber
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.

Each Urgent Question requires a Government Minister to give a response on the debate topic.

This information is provided by Parallel Parliament and does not comprise part of the offical record

Kwasi Kwarteng Portrait Kwasi Kwarteng
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I welcome my hon. Friend’s report and his contribution to the debate around the green industrial revolution. He is absolutely right that, alongside steel, we should consider all forms of innovative and novel materials—advanced materials—that can help us build back greener and more sustainably.

John Spellar Portrait John Spellar (Warley) (Lab)
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The three fleet solid support ships, at 40,000 tonnes, are equivalent in size to the two aircraft carriers. That is a lot of steel. Only this week, the Ministry of Defence finally conceded that they will be designated as naval vessels, meaning that they will be built in British yards. When the Secretary of State goes back to his office, will he get on to the Defence Secretary and tell him they must also be built with British steel?

Kwasi Kwarteng Portrait Kwasi Kwarteng
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I admire and am always impressed by the right hon. Gentleman’s passion for these issues, and I think he is absolutely right. We do have a need for huge amounts of steel in infrastructure in this country. That is why I have said repeatedly that there is a future for the steel industry in the UK.

Oral Answers to Questions

John Spellar Excerpts
Tuesday 23rd March 2021

(10 months, 1 week ago)

Commons Chamber
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Amanda Solloway Portrait Amanda Solloway
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My hon. Friend makes a really important point, and I thank him for his tireless work to champion women, especially in his role as chair of the all-party parliamentary group on women and enterprise. I sincerely thank him for that. FTSE companies have indeed made great progress, and we have seen a more than 60% increase in the number of women on boards in the past six years. The Government recognise that the science, technology, engineering and maths workforce is vital to increasing the UK’s productivity and economic growth, and I am really pleased that Government-funded programmes such as the STEM ambassador programme and the CREST awards are successfully encouraging young women into STEM roles.

John Spellar Portrait John Spellar (Warley) (Lab)
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What lessons have been learned from the operation of the vaccine taskforce.

Kwasi Kwarteng Portrait The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
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The vaccine taskforce has successfully brought together the collective effort of Government, academia and industry behind a single purpose and mission. Its hard work and focus, in partnership with the NHS and other organisations, helped the UK to become the first country to procure, authorise and deploy the Pfizer-BioNTech and Oxford-AstraZeneca vaccines. As I speak, over 30 million individuals across the UK have now received their first dose.

John Spellar Portrait John Spellar
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As the Secretary of State has rightly acknowledged, under his Department’s authorisation the vaccine taskforce has performed brilliantly, but it has needed a scientific and industrial base that was already there to work with. As he knows, there are some concerns about dependency on an overseas supply chain that may be interrupted. As the new Secretary of State, will he make a name for himself by challenging the dead hand of Treasury dogma and ensuring that Government contracts and projects across the board put British industry first at last?

Kwasi Kwarteng Portrait Kwasi Kwarteng
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I am very pleased that the right hon. Gentleman is so enthusiastic about our British ingenuity and hard work. I and my right hon. Friend the Chancellor of the Exchequer are always working extremely hard and are very focused on trying to promote innovation in this country in our research and development base.

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Paul Scully Portrait The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
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My hon. Friend has been a champion for all the businesses in her area. We have spent £407 billion on support for businesses, including those that are not eligible for the business rates holiday. The interim report from the fundamental business rates review will be published next month and the full report will be published in the autumn. I urge local authorities to expand their local policies to include some of these businesses in the additional restrictions grant.

John Spellar Portrait John Spellar (Warley) (Lab)
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The answer earlier that the Government would respond to the appalling fire and rehire in due course is Whitehall-speak for kicking it into the long grass, and it is not good enough. Will the Government learn from the methodology of their vaccine taskforce to move at speed, clarify the problem, identify a solution and make and rapidly implement decisions? Secretary of State, will you cut through the red tape and sort out this scandal? You may even make yourself popular.

Paul Scully Portrait Paul Scully
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The right hon. Gentleman has obviously been speaking to my officials because the issue has popped up on my desk this morning. We will not kick this into the long grass. We will tackle it. We will not allow bully boy tactics. We want a flexible workforce, but not at any cost.

Oral Answers to Questions

John Spellar Excerpts
Tuesday 9th February 2021

(11 months, 3 weeks ago)

Commons Chamber
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Kwasi Kwarteng Portrait Kwasi Kwarteng
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I am very pleased to be responding to my right hon. Friend. I very much enjoyed working with her in the Department and I am pleased that she is taking such an interest in our activities. In answer to her question, I would suggest that this is about policy, not regulation. The Government expect lenders to be constructive in their dealings with businesses in difficulty. I am glad to hear that in this instance her constituents are getting the support that they need from the bank, but bank regulations on forbearance are a matter for the independent Financial Conduct Authority.

John Spellar Portrait John Spellar (Warley) (Lab)
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When asset-stripper Melrose was allowed to take over GKN, the then Secretary of State said that Melrose had to honour its commitments to stay UK-based. Now that it has torn that up with its disgraceful behaviour and decision to close Birmingham’s GKN Driveline, with the loss of 500 skilled engineering jobs, what is the Secretary of State going to do about it?

Kwasi Kwarteng Portrait Kwasi Kwarteng
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As the right hon. Gentleman well knows, my door is always open, and I am very happy to meet him to discuss this issue. I recall that when my right hon. Friend the Member for Tunbridge Wells (Greg Clark) was in my place, it was a very delicate situation, but I am happy to discuss with the right hon. Gentleman ideas on how we can ameliorate it.

UK Hydrogen Economy

John Spellar Excerpts
Thursday 17th December 2020

(1 year, 1 month ago)

Westminster Hall
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.

Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.

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Alexander Stafford Portrait Alexander Stafford (Rother Valley) (Con)
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I beg to move,

That this House has considered the UK hydrogen economy.

I refer the House to my entry in the Register of Members’ Financial Interests. Members will be aware that only three weeks ago, I sponsored the UK Parliament’s very first stand-alone debate on hydrogen, which was about hydrogen transport. I believe that it was a great success and I welcome the Minister’s proactive and helpful response. It is incredibly exciting that straight off the back of that debate, I have the opportunity to broaden the scope of the conversation today to encompass the UK’s hydrogen economy. It is right that I should touch on hydrogen transport, but I am keen to emphasise hydrogen’s important role in home heating, the gas network and industry, and its wider economic benefits for the UK.

I have been clear that we need a multifaceted approach to decarbonising our economy and meeting our net zero goal. One technology alone will simply not be enough. Instead, we must move to a model where we use the best renewable fuel or technology for the job at hand. By advocating for our hydrogen future, I am in no way detracting from electric vehicles, biofuels or carbon capture and storage, among other central aspects of the matter. I believe that those must be used in conjunction with hydrogen to ensure that we do not have any gaps or holes in our decarbonisation efforts. Hydrogen, however, presents a unique opportunity for us to corner the market and become a world leader in hydrogen use and production, in a way that we simply do not with electric vehicle batteries or in the wind farm supply chain.

The UK is the perfect place to be a hydrogen power, because of expertise, home-grown companies, North sea assets and our developed infrastructure. Our wind farms provide clean renewable energy to produce hydrogen, and underwater pipelines can in theory ferry that hydrogen to and from the continent. I have reiterated time and again that a strong UK hydrogen industry will create thousands of jobs across the country, cut our carbon emissions dramatically and boost our post-covid and post-Brexit economy.

In my speech on hydrogen transport a few weeks ago, I spoke at length about the flexibility and freedom offered by hydrogen fuel cell electric vehicles, which are practically free of CO2 emissions. Energy is stored as compressed hydrogen fuel in hydrogen vehicles, which means that they can drive up to 700 km without refuelling, and just like a conventional car they take only a few minutes to refuel. The deployment of hydrogen is likely in vehicles that travel long distances or that have high utilisation, such as buses and heavy goods vehicles: those are less suited to electrification, and the consumers demand rapid refuelling.

I am particularly impressed by Wrightbus, which is building 3,000 hydrogen buses in the UK for use across the country by 2024—the equivalent of taking 107,000 cars off the road. I have highlighted that if the 4,000 zero-emission buses announced in February had been hydrogen buses, the economies of scale would have revolutionised the transport sector, helping to achieve cost parity between hydrogen and diesel buses. We need that to happen as soon as possible.

A major step in achieving cost parity would be the reform of the renewable transport fuel obligation. I have written to the Government this week to stress the need to reform the RTFO so that electricity from any renewable resource can be considered eligible. I intend that that increased hydrogen production will encourage more councils to buy hydrogen buses and boost UK manufacturing, and that the resulting stable hydrogen supply will speed up the process of cutting carbon from heavy transport sectors.

John Spellar Portrait John Spellar (Warley) (Lab)
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The hon. Gentleman rightly indicates that we should encourage the purchase of British vehicles. Should not the Department for Transport now, particularly as it will be free of supposed EU regulations after 1 January, prescribe that the moneys it provides for more environmentally-friendly vehicles ensure they are built in the UK, and not in China or elsewhere?

Alexander Stafford Portrait Alexander Stafford
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I agree that we should always buy British and build British where we can. That is why I am excited about hydrogen. It presents so many opportunities for seats such as mine to create jobs and upskill our manufacturing sector.

John Spellar Portrait John Spellar
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Will the hon. Gentleman give way?

John Spellar Portrait John Spellar
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We have a long while. Quite simply, should there not be real pressure, and a commitment from the Minister, that that is what the Department for Transport must—not should—do? It must commit to doing that.

Alexander Stafford Portrait Alexander Stafford
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I welcome that follow-up. I always say that we should, where we can, buy British and buy the best, but one of the benefits of leaving the European Union is that we can have our pick and choice of the world. I want the best to be built in Britain.

Let us turn back to the RTFO, which I know the Minister is terribly interested to hear about. A reformed RTFO will prevent taxpayers’ money from going to battery manufacturers in the People’s Republic of China. Such a simple amendment could ensure that we incentivise the manufacture of hydrogen buses by British firms, and establish ourselves as a major player in the sector. I am sure that that allays some of the concerns of the right hon. Member for Warley (John Spellar).

Hydrogen holds much promise beyond buses and HGVs, with important developments in the rail, shipping and aviation sectors. Only this week, I met virtually with the team at Hybrid Air Vehicles, a wonderful British company that is looking to revolutionise short-haul regional air travel, direct city-to-city connectivity and air tourism by way of building a practical and economical hydrogen plane. They have a working prototype and, if all goes well, will be the first to be issued Civil Aviation Authority approval post-Brexit.

Hybrid Air Vehicles is not the only British-based company in this space. ZeroAvia, a UK-US enterprise, has secured £12.3 million of UK Government funding for a certifiable 19-seat market-ready aeroplane capable of flying passengers to the UK from 2023, with letters of intent in place already with operators. That HyFlyer project is a great leap in realising the Government’s jet zero ambitions. Only last Saturday, British Airways announced that it was partnering with ZeroAvia to explore how hydrogen can power the future of its fleets. Elsewhere, Aeristech boasts market-leading hydrogen fuel cell compressors, with its 25 kW fuel compressor making it possible to deliver the power output needed for even the heaviest industry vehicles, including in aerospace.

Across the transport sector, the UK is at the forefront of innovation, from large companies to small enterprises. At one end, there is the diminutive but mighty Riversimple Movement, a hydrogen car manufacturer based in Wales, which has ambitions to build up to five small factories around the UK, creating thousands of jobs. We move up to the scale of Johnson Matthey, a British firm that is a global leader in fuel cell development, with its technology ending up in roughly a third of fuel cells globally. If the UK can maintain that advantage, we can steal a march on hydrogen, as China did on batteries.

I have been very active in discussing the hydrogen transport sector, but I am also greatly enthused by hydrogen’s potential across the UK economy. Home heating currently accounts for around 23% of national emissions, with the UK well known for having the oldest and least energy efficient homes in Europe. It has become clear to industry, and to parliamentarians, that decarbonising our gas grid is of the utmost importance if we are to meet our net zero target. Hydrogen in the gas grid will play a key role in reducing the cost of the decarbonisation of heat. Its high energy density enables it to be stored cost-effectively at scale, providing system resilience. Furthermore, hydrogen heating can be implemented at minimal disruption to the consumer, and the UK holds world-class advantages in hydrogen production, distribution and application.

Hydrogen behaves in much the same way as natural gas, and is therefore ideally placed to be utilised in existing gas pipe infrastructure. The UK is different from most European countries in terms of the number of properties connected to the gas grid and the readiness of our distribution network. In fact, 85% of homes in the UK are connected to the gas grid. Therefore, repurposing the gas grid to run off green gases has to be a vital part of the solution as we decarbonise our existing buildings.

John Spellar Portrait John Spellar
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Will the hon. Member give way?

Alexander Stafford Portrait Alexander Stafford
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I will give way very briefly. I know that the right hon. Gentleman is speaking later.

John Spellar Portrait John Spellar
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Is there not a problem at the moment that needs to be resolved, which is that hydrogen makes the metal parts of the gas grid more brittle more rapidly? Also, it is easier for hydrogen to escape from them, which is a constraint that we need to address.

Alexander Stafford Portrait Alexander Stafford
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Of course, we need to restrain all sorts of leaks in our systems, whether from our gas pipes or our water pipes. I know that there are water pipe leaks as well, and I agree that we will need to upgrade certain elements of pipe. If we want to push at the very start, hydrogen will work very quickly, but of course with all technologies we need to maintain the infrastructure, which I know the Government will do very well.

In the boiler sector, Worcester Bosch and Baxi are leading the way in producing the world’s first hydrogen-ready boilers, which can run off either pure hydrogen gas or natural gas, including natural gas blended with up to 20% hydrogen—a mixture that all boilers can utilise, so we are ready to go with that mix. Hydrogen boilers have a distinct advantage over heat pumps, which are another solution, in that they are many thousands of pounds cheaper, costing about the same as a gas boiler. It is estimated that a hydrogen boiler will cost £2,500, whereas a heat pump for a house will cost between £6,000 and £18,000. That is important in terms of fuel poverty, as the cost of heat pumps is potentially unaffordable for some families.

Furthermore, a hydrogen boiler does not take up much space and takes a matter of hours to install. In contrast, an average of three days is needed to fit a large and unwieldy heat pump. It is also worth bearing in mind that the electricity grid has five times less capacity than gas, and relies on gas in the winter to prop it up, making the gas network the obvious choice for resilience purposes.

If there are subsidies for heat pumps, why are there not considerable subsidies for the production of hydrogen? There should be, as that would also help to bolster more jobs. Earlier today, my hon. Friend the Member for Sedgefield (Paul Howell) raised with me the need to train up more boiler installers so that we have those skills. The Government should be supporting that.

I am pleased to note that the Government have helped initiate a number of projects that have demonstrated the technical and economic viability of hydrogen as a pathway to decarbonising the gas grid. I have been privileged to learn about many of them since my election, although hon. Members will agree that the preference for similar-sounding names is quite the tongue twister. They include the Hy4Heat programme, the HyDeploy project run by ITM Power, Cadent and the Northern Gas Networks, the H21 project led by the Northern Gas Networks, National Grid’s HyNTS Hy Street experiment, and SGN’s H100 Fife project.

The Net Zero Teesside and HyNet large-scale projects are crucial to stimulate the mass production of hydrogen so that we can move from theory to reality when it comes to home heating. Those projects are a firm demonstration of the Government’s interest in and commitment to hydrogen as a technology to help us achieve net zero. They have also provided evidence of the technical and economic viability of hydrogen as a pathway to low-carbon heat, and have helped us address some of the inherent challenges of rolling out technology. In addition, the geographical spread of the projects across the United Kingdom—many are in left-behind areas—shows that hydrogen can play an important part in the Government’s levelling-up agenda.

The success of those projects shows that the distribution, transmission and production of hydrogen must be a priority for the UK. However, the UK is at risk of being overtaken by other countries that have more aggressive and developed approaches to hydrogen. For example, Germany has earmarked €9 billion for the expansion of hydrogen capacity, targeting 5 GW by 2030 and a further 5 GW by 2040. Japan established its hydrogen strategy in 2017, which has given industry the confidence to invest.

To date, the UK has lacked the clear policy framework that exists in Japan, and Government investment has been lower than in countries such as Germany. That is precisely why the Prime Minister’s 10-point plan was so welcome, and why the forthcoming hydrogen strategy must be ambitious, wide-reaching and published as soon as possible.

Having addressed hydrogen transport and home heating, I now turn to hydrogen’s potential for use in industry. That is of great importance to constituencies in the former red wall such as mine, Rother Valley. Traditionally, my area has relied on energy-intensive industrial processes. Sheffield is, of course, famous for steel making. It is vital that we decarbonise our industry and provide our factories with renewable energy that is powerful, in ready supply and affordable. Rother Valley bore the brunt of British coal’s lost competitiveness compared with cheaper foreign imports, and the high cost of energy and the struggling industry has been the narrative ever since. We now have a chance to ensure energy sustainability for generations. In doing so, we will turbocharge our national industries in the post-Brexit world.

In the light of that, I warmly welcome National Grid’s ambitions to build a hydrogen transmission backbone consisting of pipelines connecting major industrial hubs across the UK. Such hubs exist in Humberside, Teesside, south Wales, Grangemouth in Scotland, Merseyside and the Isle of Grain in Kent. The concept is that significant volumes of hydrogen will enable the build-out of 100% hydrogen pipelines to decarbonise early adopters in industry and transport. Cadent is planning a similar idea of piping 100% hydrogen by Pilkington’s glassworks in Ellesmere Port so that the factory can reduce its costs and stay open to save jobs.

Members will know that I am always keen to focus on my region of Yorkshire and the Humber in this House, which is why Zero Carbon Humber is of such relevance to me and to industry in and around my constituency. Humberside is currently the UK’s largest carbon emitting industrial area, but Zero Carbon Humber aims to make it the world’s first net zero carbon industrial cluster. It is a wonderful example of the Government working hand in hand with the private sector to fund an ambitious endeavour. It is a staggering statistic that H2H Saltend in Zero Carbon Humber can produce more than half the Government’s planned 1 GW of hydrogen by 2025, and is one of the few places in the world where hydrogen, carbon capture and offshore wind congregate to create a “super place”. The towns and villages around Zero Carbon Humber offer opportunities for hydrogen neighbourhood heating trials, essential for decarbonising the heat networks I spoke about earlier.

Around my constituency, steelmaking is a huge carbon emitter, but it is also a huge employer, as it is across the UK. On Humberside, hydrogen can be injected into blast furnaces in the steelmaking process, displacing fossil gasses and producing steam as a by-product rather than carbon dioxide, although any CO2 is captured and stored. We need that technology in Rother Valley and South Yorkshire to protect our plants and factories and to give British steel the boost it so badly deserves.

I envisage the Zero Carbon Humber project being recreated in Rother Valley, tying in with my plans for a hydrogen valley in my constituency. My hydrogen valley will create high-skilled jobs for my constituents, attract investment and new industries to the area, and decarbonise the towns and cities of South Yorkshire.

ITM has already acted, building the world’s largest electrolyser factory on the border of my constituency and expressing its desire to build large hydrogen refuelling stations across our nation. In that vein, the Government must encourage the development of net zero industrial clusters across the UK. That is a crucial way to revitalise left-behind areas, protect and create jobs, decarbonise polluting industry and help our manufacturers adapt, to ensure that they not only avoid closure but thrive in our green future.

I have so far addressed the UK’s hydrogen economy by sector, demonstrating that we can use hydrogen to decarbonise transport, the gas network and industry. What are the benefits to the British economy of such a hydrogen economy? The Hydrogen Taskforce believes that hydrogen can add up to £18 billion in gross value added by 2035 and support 75,000 additional jobs in every part of the United Kingdom, many of them in the north of England.

Industry, offshore wind and CO2 storage assets are currently concentrated in the north, meaning that investment in hydrogen production is likely to create and protect more jobs in areas that have been hit hardest by the covid-19 crisis. The existing pipeline of hydrogen production projects has a strong regional spread and will support the Government’s levelling-up agenda. More immediately, the business community has told the Treasury that is has £3 billion of shovel-ready private investment hydrogen projects and is merely awaiting the right policy framework and commitment from the Government.

As the UK looks to bounce back from the covid-19 crisis, investors in hydrogen offer sustainable economic growth opportunities that will kick-start the green recovery. Speeding up hydrogen solutions will allow the UK to build on existing areas of expertise and global leadership. With a value chain that spans production, storage, transmission and distribution, along with downstream appliances, this growing global market can support thousands of jobs in the UK for decades to come.

With the benefits of the UK’s hydrogen economy ringing loudly in their ears, the Government must act decisively and boldly, to steal a march on our competitors and cement Britain’s place as the hydrogen nation. I have already mentioned the absolute necessity of the prompt publication of the forthcoming hydrogen strategy. In addition to that, I have several policy asks of the Minister.

I will first reiterate my policy asks from my hydrogen transport debate, which, unsurprisingly, are still relevant three weeks later. Those were to set ambitious targets for the mass commercialisation of hydrogen technology; to stimulate supply and demand in parallel, focusing initially on regional clusters; and to ensure relevant Government Departments work collaboratively.

However, this debate has a wider scope, so there are additional specific policy asks. Generally, we must ensure that the upcoming hydrogen strategy sets out a clear road map for how the UK will create the renewable hydrogen it needs. We must institute long-term, stable and predictable policy and regulatory frameworks to reassure investors. We must ensure that the Government and Ofgem make decisions quickly and decisively. We must support hydrogen innovation by funding research and development. We should support trials of 100% hydrogen. Government industries should now invest and collaborate to ensure that technology, development and commercialisation take place in tandem.

For transport, we must aim for at least some of the 4,000 zero-emission buses to be hydrogen buses. Most importantly, we must reform the RTFO to allow renewable energy from all sources to be eligible. We must introduce changes to the bus service operators grant to stop discrimination in favour of diesel vehicles, and the Department for Transport must build on the University of Birmingham’s hydrogen train success, by supporting hydrogen train fleet development. Additionally, we must support the opening of 100 hydrogen refuelling stations by 2025, to support the roll-out of hydrogen transport.

For the gas network and home heating, we must support the roll-out of hydrogen-ready boilers for existing homes by 2025 at the latest; outline in detail how the vision for hydrogen towns can be delivered; set out how the gas grid can be repurposed to enable the safe distribution of hydrogen; enable hydrogen to be blended into the gas network; and ensure that the heat and buildings decarbonisation strategy promotes a technology-neutral approach. We must also provide clarity on the business models that underpin hydrogen—for example, carbon capture and storage, pricing and demand mechanisms.

For industry, we need to lay out specific hydrogen production targets, prioritise the reskilling and upskilling of workers, and ensure that there is early decision making on permissions, business models and the role of regulators. I appreciate that this is a substantial policy list, but I hope the Minister will be able to enlighten me about his plans, both verbally during this debate and in writing at a later date.

As I draw to a close, I reiterate that I believe the hydrogen economy will be transformative for the UK. Not only can it decarbonise across all sectors, ensuring that we achieve our net zero target, but it protects industry and retools it for our green future. The hydrogen economy will create skilled jobs in left-behind areas, such as Rother Valley, revitalising parts of the UK that have suffered the grim effects of deindustrialisation.

We have a unique opportunity to corner the hydrogen market, positioning Britain as the world leader in the production and use of hydrogen. That will not only be a shot in the arm domestically as we recover from the coronavirus pandemic, but it will enable UK plc to export our technology and expertise around the world in a post-Brexit age. The hydrogen economy will improve our energy security and resilience, which are critical in light of both the devastating pandemic and hostile Chinese and Russian relations. However, in order to reap these rich rewards, I urge the Government to act now to avoid losing out, as we did with batteries and the wind farm supply chain. We have first-mover advantage, but other countries are waking up; we must be ahead of them.

In a brave new decade with many unknowns, we do know that decarbonising our economy is important for environmental, economic, security and health reasons. Hydrogen can be one part of our energy solution, used in conjunction with other technologies, if we take action now to ensure that the UK’s hydrogen economy works for everyone, and we confirm our place as the hydrogen kingdom.

--- Later in debate ---
Christian Matheson Portrait Christian Matheson (City of Chester) (Lab)
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It is a great pleasure to serve under your chairmanship, Ms McDonagh. I congratulate the hon. Member for Rother Valley (Alexander Stafford) on securing this debate and his comprehensive introduction.

There was some criticism, slightly reflected in the hon. Gentleman’s positive introduction, about the comparison with other countries in terms of investment. My right hon. Friend the Member for Doncaster North (Edward Miliband), speaking from the Front Bench earlier in the week, mentioned that. Today, however, I want to be positive about the Government’s strategy as it stands. [Interruption.] I am being positive to the Minister and supporting him. I will support the issue of financing, particularly because of a point raised by the hon. Member for Waveney (Peter Aldous), which was eloquently put, about this not being a competition but a jigsaw. I will refer back to that excellent point.

I am here to represent the case for my own region in the north-west and, in particular, Cheshire, which has a historical position in the chemicals industry through the salt mining that took place in mid-Cheshire for many years. In the energy sector, we also had strong nuclear expertise, through Warrington and Capenhurst in my constituency. Energy is part of our region’s DNA. There are offshore wind farms, which we share—as well as the ambition to drive forward our own hydrogen project—with north Wales, in the cross-border area represented by the Mersey Dee Alliance. The scheme that we are keen to promote has widespread support across Manchester, Liverpool, Cheshire and north Wales. Our local enterprise partnerships and the North West Business Leadership Team are behind it, as are the local councils.

The exciting opportunities that we have in Cheshire and Warrington will give us the chance to drive forward a new hydrogen economy at pace. Industry is at the forefront of proposals that are deliverable quickly, and which will protect and support high-value employment and can create thousands of green jobs in the local economy. One of the main projects is HyNet, which could start capturing industrial carbon dioxide emissions as early as 2025, if the Government make speedy decisions on the industrial decarbonisation challenge programme.

Hon. Members may be aware that the north-west region has the highest concentration of advanced manufacturing and chemical production in the UK and industry accounts for nearly a quarter of the region’s 40 million tonnes of annual CO2, so if the Minister can drive this forward, he will make a real difference.

As part of the projects that we are proposing, Liverpool Bay gasfield owner ENI has now been licensed to store CO2 permanently. Detailed design work is already under way on the pipelines needed to connect the Ellesmere Port industrial cluster to the CCUS—carbon capture, usage and storage—facility.

We also have the potential to start producing low-carbon hydrogen at scale by the middle of the decade, subject to the positive decision on HyNet. The Essar refinery complex at Stanlow could ultimately produce 18 TWh per year of low-carbon hydrogen for use to fuel industry and transport and, potentially, to feed into the gas networks in nearby homes. I say again to the Minister and the House: we already have the human infrastructure —the expertise—as well as the physical, in place and ready to go.

John Spellar Portrait John Spellar
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Time and again, even when there is the expertise, Whitehall puts new capacity down south, as it did with nuclear. There was considerable nuclear expertise in Cheshire, yet the next development was put down in Oxfordshire. More recently, with vaccine production, Whitehall had a choice between Oxford and the north-east. Once again, it chose Oxford. Must we not change that mindset in Whitehall?

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John Spellar Portrait John Spellar (Warley) (Lab)
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It is a pleasure to serve under your chairmanship, Ms McDonagh. I congratulate the hon. Member for Rother Valley (Alexander Stafford) on securing the debate and on his considerable enthusiasm and the detail with which he presented it. I think we all agree that hydrogen has considerable potential, but at present that is exactly what it is. I do not mean that in the way that the electricity industry talks about nuclear fusion—nuclear fusion is the future and always will be. I mean it as a call to action, so that we explore the production and utilisation of hydrogen at pace. One benefit of covid has been to demonstrate how, without cutting corners, we can evaluate systems and roll them out. We, particularly Whitehall, need to learn from that.

My hon. Friend the Member for City of Chester (Christian Matheson) slightly chided me to say that we were going off topic, but given the way that the Government work, it is absolutely crucial that we get to the heart of this and change the processes within government, otherwise we will find it very difficult to survive in this future world. Key to this is the civil service’s addiction to process, with extended timescales and time not being a factor. That is true under Governments of all parties. It is enormously important that Parliament relentlessly holds it to account to get things moving.

It could be argued that both Brexit and covid enable and also force the Government to change. That means that we are compressing processes but also, and equally importantly, paralleling them: trying different approaches, seeing what works, and seeing what does not work and shutting that down.

To start with transport, buses and trains are a considerable component of the hydrogen economy and contribute to clean air, particularly in urban areas—by definition—but an important issue is where they are made. Up until now, the Government have been indifferent to where they are manufactured. We have the capacity in Ballymena, Falkirk and Leeds to produce the buses, but what those facilities need, of course, is a market. They need to get on the manufacturing learning curve. The operators need to get the operational experience and find out what the issues and problems are. There needs to be continuing feedback between operators and manufacturers, and that will of course enable us to secure the export markets that have been mentioned.

It might be that, in some conditions, batteries will prove to be better. We need to test that out and assess what will work. We need to learn the lessons that have been mentioned before about where we missed out on batteries and allowed that work to go abroad. We have the largest installation of wind farms in Europe, yet so much is manufactured abroad. Governments, including devolved Administrations, have not focused on that enough.

On domestic heating, nobody mentioned that town gas is composed of a substantial percentage of hydrogen. It might be a much better answer, as was mentioned, than heat pumps for flats and terraced properties, which is a big issue in moving to alternative form of heating.

Also, we need to look at how the production of hydrogen will take place. Let us be realistic. If we are going to roll out the utilisation of hydrogen, some of that initially, but hopefully very shortly, will need to come from hydrocarbon sources. That might be dealt with by carbon capture, but I sometimes think that that is the easy answer that people trot out to deal with that. We need to move much more towards green sources of hydrogen, and we therefore need to look at the institutional barriers. It is truly extraordinary that in the first two months of this year, National Grid paid wind farm operators £72 million to not run their wind farms. That is absurd, and it has been going on for a decade.

Alan Brown Portrait Alan Brown (Kilmarnock and Loudoun) (SNP)
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Is the right hon. Gentleman aware that £50 million was also paid out to turn off the nuclear plant? It is not just wind farms.

John Spellar Portrait John Spellar
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Indeed. I was not being dismissive of wind farms; I was talking about the institutional barriers. That is not a technical barrier; it is an institutional barrier. It is the same with nuclear. The problem is that in order to qualify for the renewable transport fuel obligation that was mentioned by the hon. Member for Rother Valley, new capacity has to be utilised. We have existing capacity, even though it is not needed. At the same time, we are paying the wind farm or nuclear operators, and that is acting as a barrier to producing cheaper hydrogen. These are the sorts of areas where Ministers, with the support of Parliament, need to be cutting through. We obviously also need to look at the question of energy storage—hydrogen is an effective form of energy storage—but we need to do a proper evaluation.

I am mindful of the constraints on time. I am slightly concerned about the Government’s announcements, because I would like to see a bit more cost accounting. I would like to see a proper analysis of how much each different system is costing. I am not saying that we should not have a subsidy at a certain stage. I would like to see it being a diminishing subsidy, because we have to exercise that rather than all having our pet theories and ideas, important as they are for driving the process. We need to make sure that this is affordable going forward. If we are to compete in an international market, that is where it will really be tested—whether something is affordable or not. I shall yield to the Chair and conclude my remarks.

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Kwasi Kwarteng Portrait The Minister for Business, Energy and Clean Growth (Kwasi Kwarteng)
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It is a real pleasure to conduct this debate with you in the Chair, Ms McDonagh. I am very pleased to be taking part. I am conscious that we have to revert back to my hon. Friend the Member for Rother Valley (Alexander Stafford) at the end, so I have only about eight minutes—that shows how full of content and well informed the speeches were. It is a real pleasure, as Energy Minister, to take part in a debate in the House of Commons with so many right hon. and hon. Members participating at such a high level. It is the House of Commons at its best.

We heard a range of opinion, but we broadly agree about the way forward and the potential dynamism of the hydrogen economy. I pay special tribute to my hon. Friend for the tireless, indefatigable way in which he pushes hydrogen at every opportunity. Even though my officials might not agree, I hope he continues to do so, because it is absolutely necessary for Members of this House to hold the Government to account. I am very happy to take part in these debates and express the Government’s point of view, share some of our thinking and respond to points that Members of the Opposition parties make.

The first thing I want to talk about is investment. One hears all the time about the German strategy—I have read the German strategy and the EU strategy this year. Ours will be different because we are looking at blue hydrogen, which the hon. Member for Southampton, Test (Dr Whitehead) alluded to, and green hydrogen. The EU and German strategies talk almost exclusively about the production of renewable hydrogen. We in this country, given our North sea heritage and the assets there, want to do both. Ours will be a very interesting strategy. It is the first ever hydrogen strategy that the Government have produced. When it is published in the first half of next year, I look forward to having more debates and answering more questions about it.

This has been an extremely busy time for the energy industry. The Government have had the Prime Minister’s 10-point plan, the second point of which was all about hydrogen. It outlined our ambition for a 5 GW capacity. Subsequent points in the 10-point plan referred to the use of renewables and decarbonised sources of fuel in jet propulsion and marine transport. A number of Members mentioned the role of hydrogen in transportation. It is absolutely right that we should be focusing on HGVs, for which it is particularly suited.

I can say to my hon. Friend the Member for Warrington South (Andy Carter) that I have been in a hydrogen car. I was not driving it—I was there in a ministerial capacity, so someone else was driving—but I look forward to taking that step in the imminent future.

My hon. Friend the Member for Rother Valley and the hon. Member for City of Chester (Christian Matheson) have done a great job in this debate of highlighting the strengths of the HyNet industrial cluster. Everyone has said, “Let there not be a beauty contest,” yet they have been very good at presenting the particular attractions of their areas. They have done a very good job on that. I am on the record as having pledged to visit HyNet, hopefully in the next few months. I have spoken to representatives of the cluster on Zoom and in various other forums, and they are doing a fantastic job in pushing this agenda.

On deployment, the hon. Member for Kilmarnock and Loudoun (Alan Brown) said that we should be going faster. We can always be going faster, and he is absolutely right to be holding the Government’s feet to the fire. We should seek to deploy a lot of these business and financial incentives earlier, and I am working closely with officials to do that. However, I cannot stress enough that the success of the hydrogen deployment will involve a substantial degree of private capital and private investment. If we look at the deployment—the success—in making the offshore wind industry in this country the biggest installed capacity of any country in the world, we see that the reason it happened was that something like £94 billion has been spent since 2010—the vast majority of which was private capital. It was not merely a function of the Government writing cheques; it was a function of the Government creating a framework and creating a CfD process, which private capital could participate in and spend and deploy the resources to develop the capacity. So I have to stress—it always comes up, and it is quite right for Opposition Members to push the Government on it—that ultimately the strength of the investment and the vast majority of the capital that will be deployed will come from private sources, which is a recipe for success.

I should mention the fact that we have hydrogen trials and that the Prime Minister announced in his 10-point plan that we want to see a hydrogen town. The hon. Member for Kilmarnock and Loudoun rightly raised the issue of the gas standards needing to catch up with the potential of hydrogen deployment. I have a conversation on that subject with colleagues in the Department of Health and Social Care on a regular basis, because ultimately that is their responsibility, given the health impact and the relevance to health and safety.

There are so many other points that I want to raise. The hon. Member for East Kilbride, Strathaven and Lesmahagow (Dr Cameron), who is no longer in her place, made a very good point about how we should try to bring the public with us. Even today, there is not much knowledge or engagement from our constituents or from people across the country with regard to hydrogen issues. It is quite legitimately a job of Government to improve that situation. However, it is also the job of all of us as MPs to try to get that message out, because it is not simply the Government who have the platform—the bully pulpit. Each and every one of us here, as individual MPs, can also make the case.

John Spellar Portrait John Spellar
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RTFOs?

Kwasi Kwarteng Portrait Kwasi Kwarteng
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The right hon. Gentleman has wonderful timing; I was just coming to the points that he made. He made some very good points, particularly—if I may say so—about town gas. He is quite right, and the hon. Member for Southampton, Test made this point as well, that the transition from town gas to natural gas that happened in the 1960s and 1970s was a whole-country endeavour. He is also right to point out, as I think the hon. Member for Southampton, Test also did, that town gas was largely composed of hydrogen. So in a way, having hydrogen in the gas network is not so novel an idea; it has happened before. Of course it was a much dirtier gas then, but hydrogen as the basis of a heating system is something that we can certainly achieve.

The last thing I will say before I conclude—

John Spellar Portrait John Spellar
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RTFOs?

Kwasi Kwarteng Portrait Kwasi Kwarteng
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We can discuss that issue at another time; I am afraid that I am limited by time constraints today.

The last thing that I will say in conclusion is that this is not a beauty contest; there is huge opportunity for every part of the country to benefit from the hydrogen revolution. I look forward to speaking to right hon. and hon. Members about how we can best deploy capital in the levelling-up agenda. The fact that HyNet is represented by Members on both sides of the aisle, and also other areas, is a really good sign. We can work together to bring about the hydrogen revolution.

Oral Answers to Questions

John Spellar Excerpts
Tuesday 21st July 2020

(1 year, 6 months ago)

Commons Chamber
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Alok Sharma Portrait Alok Sharma
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I thank my hon. Friend for her acknowledgement of the work we have been doing. The key has been to open businesses safely and securely in a cautious and phased manner, and we will continue to do that.

John Spellar Portrait John Spellar (Warley) (Lab)
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If he will make a statement on his departmental responsibilities.

Alok Sharma Portrait The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)
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The coronavirus vaccine taskforce set up in my Department under the excellent leadership of its chair, Kate Bingham, has been making good progress. The Government have supported the vaccines being developed at Oxford University and Imperial College and have now secured access to three different vaccine classes, as well as a treatment containing covid-19 neutralising antibodies. We are also investing, as I said earlier, in vaccine manufacturing capacity in the UK, and the taskforce is doing all it can to ensure that the United Kingdom gets access to a safe and effective vaccine as soon as possible.

John Spellar Portrait John Spellar
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Well, that is a very welcome announcement, but I draw the Secretary of State’s attention to the tsunami of job losses now facing us. What industry needs right now is orders to get the lines running. That is not just for the big companies, but the whole supply chain. Does he accept the role of Government, not just as regulator and funder, but also as customer? Too often, the public sector, the civil service, local government and the police, fire and ambulance have, frankly, let British industry and British workers down, claiming they are bound by so-called EU rules. Now we are coming out of the EU, will he get going, shake up the civil service, put British industry first, get the orders out there and get the production lines moving?

Alok Sharma Portrait Alok Sharma
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I do not think there is much more to say. The right hon. Gentleman has made a powerful point.

UK Internal Market: White Paper

John Spellar Excerpts
Thursday 16th July 2020

(1 year, 6 months ago)

Commons Chamber
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Alok Sharma Portrait Alok Sharma
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Yes, indeed, because if there were regulatory barriers, for instance, if there were even small differences on things such as food labelling requirements, costs would of course be raised for small businesses, which they ultimately may pass on to consumers. Therefore what we are proposing is good not only for businesses of all sizes, but for consumers.

John Spellar Portrait John Spellar (Warley) (Lab)
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These structural arrangements are enormously important, but they only go so far because so are political culture and drive to ensure that we get Britain back to work. Yet Government purchasing rules and practice still grovel to so-called EU rules—unlike, incidentally, most other EU countries. Now the Government are free of those rules, when are they going to actively back British business and British workers in England, Scotland, Wales and Northern Ireland? There are no more EU excuses. Act now!

Alok Sharma Portrait Alok Sharma
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The right hon. Gentleman, for whom I have enormous respect, as ever makes his case very forcefully. He talks about public procurement, and I look forward to his thoughts as part of the consultation.

Electricity

John Spellar Excerpts
Monday 15th June 2020

(1 year, 7 months ago)

Commons Chamber
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Kwasi Kwarteng Portrait Kwasi Kwarteng
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I know that my right hon. Friend is a noted sceptic about climate change—or he was, certainly, until very recently—but he will know that any country that, like us, wants to reach the net zero commitment will necessarily be reliant on much greater interconnector capacity, from Europe in many instances and sometimes from countries such as Norway that are outside the EU, than is currently the case. That is exactly why we are proceeding on this path.

John Spellar Portrait John Spellar (Warley) (Lab)
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Should we not be looking at the underlying proposition, given the enormous increase in renewables? Is it not absurd that we have been importing electricity through the interconnector while paying renewable companies, particularly those connected to wind farms but also to solar, to switch off because of low levels of demand? Is there not a disconnect in this market at the moment?

Kwasi Kwarteng Portrait Kwasi Kwarteng
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I think there are issues, which the right hon. Gentleman raises, with regard to pricing and the ability to have a much more flexible grid system. With respect, however, these regulations have nothing to do with that. That is a separate debate.

John Spellar Portrait John Spellar
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With respect, the Minister seems to be embedding the current dysfunctional system into new regulation. I fully accept that the Government have to do something about this because of EU decisions, but, equally, there does not seem to be, and I do not get the sense of, an understanding that this is a defective mechanism that needs to be reformed, and probably quite quickly.

Kwasi Kwarteng Portrait Kwasi Kwarteng
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The right hon. Gentleman is absolutely right that the system needs to evolve. We are looking at some of the smart pricing he alludes to and the flexibility of the system, and I am sure he will read our White Paper with interest. However, the issue of the flexibility of the system is not really germane to this statutory instrument on the capacity market, which, as he and my right hon. Friend the Member for Wokingham (John Redwood) know, is a technology-neutral device.